Market developments
Equities: Global equities experienced a volatile week, initially hitting fresh records due to AI-fueled optimism and dovish signals from the Federal Reserve. However, rising U.S. and China trade tensions, culminating in President Trump announcing a potential 100% tariffs on Chinese imports, triggered a sharp reversal. Later in the week, U.S. equities fell due to regional bank stress, while European stocks rose thanks to staples and earnings reports.
Fixed Income: U.S. Treasury yields remained range-bound, supported by safe-haven flows after the tariff shock. In Europe, the France-Germany yield spread remained wide, reflecting political risk. Later in the week, U.S. Treasuries rallied on weak risk sentiment, sending yields to new three-year lows for the 2-year Treasury yields.
Commodities: Precious metals, particularly gold and silver, saw a surge amid strong haven demand and a historic short squeeze, with gold exceeding $4,000 USD per ounce, while oil prices closed the week down over 2%.